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Posts tagged with IS COLLEGE WORTH IT

Despite the sob stories you hear about unemployed college graduates, bachelor’s degrees have actually gotten more valuable over time. The wage gap between the typical college graduate and those who have completed no more than high school has been growing for the last few decades. In the late 1970s, the median wage was 40 percent higher for college graduates than for people with more than a high school degree; now the wage premium is about 80 percent.

Some of that wage premium has to do with the changing nature of American jobs and the skills (and social networks) attained in college. Some of it may have to do with a change in the mix of students who go to college and those who don’t. As college enrollment becomes more expected of high school students — as of October 2011, 68.3 percent of 2011 high school graduates were enrolled in college — the shrinking group of students forgoing college may have other characteristics that are associated with lower wages.

At the very least it seems as if more employers are using bachelor’s degrees as a signal of drive or talent, regardless of of the relevance of the skills actually learned in college.

That is one implication of an analysis from Burning Glass, a company that analyzes job ads from over 20,000 online sources ranging from major job boards to small and midsize employer sites. The company’s chief executive, Matthew Sigelman, says that employers are increasingly requiring college degrees for positions that did not traditionally require higher education.

I asked his company to compile a list of occupations that have shown the most “up-credentialing” in the last five years — that is, occupations whose job ads were significantly more likely to name college diplomas as a prerequisite in 2012 than they were in 2007. Read more…

It shows how likely you are to end up in any given income quintile, based on the income quintile your parents were in. In other words, how much mobility do Americans really have? Are they stuck in the income class they were born to?

The answer depends largely on whether you went to college.

As the report notes:

Without a degree, children born to parents in the bottom income quintile have a 45 percent chance of remaining there as adults. With a degree, they have less than a 20 percent chance of staying in the bottom quintile of the income distribution.

Higher education appears important for those born into relative wealth, too. Read more…

The study reported on a survey of high school graduates of the classes of 2006-11 who do not have college degrees and are not enrolled in school full time. This group overwhelmingly believes that additional education beyond a high school diploma is required to succeed:

Heldrich Center for Workforce Development, Rutgers UniversityThe online survey was conducted between March 21 and April 2, and covered a nationally representative survey of 544 high school graduates from the classes of 2006-11 who did not have bachelor’s degrees and were not full-time students. The margin of sampling error was plus or minus five percentage points.

Seven in 10 of these recent graduates said they would need more education if they were to have a successful career. Despite their belief in the value of post-secondary education, though, only 38 percent definitely planned to attend college to get more education in the next five years. Barriers included skyrocketing tuitions and family obligations.

Once upon a time, these young people were much more hopeful about their educational futures. Read more…

8:06 p.m. | Updated to correct title and administrator of youth survey.

With so much focus on whether college is worth it, relatively little attention has been paid to the value of certificate programs – vocational courses of study beyond high school that do not lead to an associate’s or bachelor’s degree.

Over the last few years, these certificates have been proliferating, in fields ranging from health care and computer technology to cosmetology, interior design and paralegaling.

For some people, they can be viable alternatives to a full-blown college degree, lifting earnings well above what the average high school graduate earns. The median earnings of people who hold certificates are 20 percent higher than the median earnings of workers who go no further than a high school diploma. If certificate holders work in the field in which they earn the certificate, their median income is just 4 percent less than the median income of associate degree holders. Read more…

If the American dream is doing better than your parents, only about half of recent college graduates think they will achieve it. They are even more pessimistic about the prospects for their peers, according to a new survey of recent graduates from the Heldrich Center for Workforce Development at Rutgers University.

Here’s a chart showing how graduates of the college classes of 2006-11 feel their generation will fare compared to the generation before them, and how the respondents personally will fare compared to their own parents:

Source: “Chasing the American Dream: Recent College Graduates and the Great Recession,” Heldrich Center for Workforce Development. Chart shows responses from a nationally representative sample of 444 recent college graduates from the class of 2006 through 2011, with a margin of sampling error of plus or minus 5 percentage points.

The bar on the right shows that just shy of half (48 percent) of college grads from the classes of 2006-11 believe they will have more financial success than their parents. A fifth (20 percent) say they will probably have less financial success than their parents, and about 29 percent say they’ll do about as well.

If that sounds discouraging, take a look at the bar on the left, which shows responses to a question about whether today’s generation of young people over all will be more successful than their parents. A mere 16 percent said yes.

A majority — 58 percent — predicted that their generation will have less success than the generation before.

It’s not clear why respondents are more pessimistic about their peers than they are about themselves.

Perhaps it’s the Lake Wobegone Effect: Everyone believes himself or herself to be above average.

Or perhaps they realize the dwindling opportunities for members of their age group who didn’t go to college.

I still get a lot of e-mail from readers asking whether college is really worth it, given the huge debt burden it produces (as my colleagues have been documenting) and the large number of unemployed recent graduates.

Iin online interviews conducted by Knowledge Networks in April and May of this year, two of three graduates of the college classes of 2006-11 said they would do something differently if they could do it all over again. As you can see, only a measly 3 percent said they regretted having gone to college in the first place:

Source: “Chasing the American Dream: Recent College Graduates and the Great Recession,” Heldrich Center for Workforce Development. Chart shows responses from a nationally representative sample of 444 recent college graduates from the class of 2006 through 2011, with a margin of sampling error of plus or minus 5 percentage points.

Last month I wrote about how state budget cuts were forcing public universities to raise tuition and cut programs. Some of the subjects most valuable for job and economic growth — like engineering, computer science and health sciences — have been most vulnerable, because they also happen to be among the most expensive to teach.

Last week, Gov. Rick Scott of Florida signed a law cutting higher education funds in the state by $300 million, according to local papers. This follows cuts totaling $767 million over the previous five years, according to the Center for the Study of Education Policy at Illinois State University.

The University of Florida, the state’s flagship school, has been hit particularly hard. In an opinion article in The Gainesville Sun, a former university administrator said this year would bring “$38 million in budget cuts, creating an accumulated reduction in state funding to U.F. of 30 percent, or $240 million, since 2006.” Read more…

Rick Santorum’s recent diatribe against higher education, in which he called President Obama a “snob” for wanting “everybody in America to go to college,” has reinvigorated the seemingly endless debate over whether college is worthwhile.

Economic evidence consistently and compellingly documents the value of postsecondary education in general (as Economix contributors have written about more than once). But high average returns do not necessarily imply that everyone should invest in college. So is there anyone who should not go to college – and if so, who?

The answer is clearly yes: some folks do have good reasons to skip (or at least delay) college. But the good reasons are more limited than the ones Mr. Santorum and other college skeptics typically cite.Read more…

Last week I wrote about how state cuts to public colleges meant shifting more of the burden of educating students onto the federal government. As state subsidies fall, tuition rises, and needy students look to federal subsidies like Pell Grants and Stafford loans to make up the difference.

Because of the increasing reliance on federal aid, the Obama administration has championed a series of increases in the maximum Pell Grant students can receive. Even so, tuition growth is still fast outpacing the rise in the Pell Grant ceiling.

As you can see, the share of higher education costs that the maximum Pell Grant covers is about half of what it was 30 years ago.

That means students are having to pay for a higher share of the costs of their education. Student incomes, however, have not kept up with the pace of their out-of-pocket tuition costs. Hence the big surge in student loan debt: The country’s outstanding student loan balance now surpasseseither its total credit card balance or its total auto loan balance.

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Economics doesn't have to be complicated. It is the study of our lives — our jobs, our homes, our families and the little decisions we face every day. Here at Economix, journalists and economists analyze the news and use economics as a framework for thinking about the world. We welcome feedback, at economix@nytimes.com.